77-112. Actual value, defined.

Actual value of real property for purposes of taxation means the market value of real property in the ordinary course of trade. Actual value may be determined using professionally accepted mass appraisal methods, including, but not limited to, the (1) sales comparison approach using the guidelines in section 77-1371, (2) income approach, and (3) cost approach. Actual value is the most probable price expressed in terms of money that a property will bring if exposed for sale in the open market, or in an arm's length transaction, between a willing buyer and willing seller, both of whom are knowledgeable concerning all the uses to which the real property is adapted and for which the real property is capable of being used. In analyzing the uses and restrictions applicable to real property, the analysis shall include a consideration of the full description of the physical characteristics of the real property and an identification of the property rights being valued.

Source

Annotations

1. Actual value

2. Miscellaneous

1. Actual value

Real property sold at auction is sold in the ordinary course of trade within the meaning of this section. In re Estate of Craven, 281 Neb. 122, 794 N.W.2d 406 (2011).

Under this section, actual value of real property for purposes of taxation shall mean the market value of real property in the ordinary course of trade. Firethorn Invest. v. Lancaster Cty. Bd. of Equal., 261 Neb. 231, 622 N.W.2d 605 (2001).

The statutory measure of actual value is not what an individual buyer may be willing to pay for property, but, rather, its market value in the ordinary course of trade. US Ecology, Inc. v. Boyd Cty. Bd. of Equal., 256 Neb. 7, 588 N.W.2d 575 (1999).

Pursuant to subsection (1) of this section, although differing factors may cause the appraised value of property to be less than its actual value, some relationship exists between appraised and actual value such that the appraised value is relevant evidence of at least the minimum value of the land. First Nat. Bank of York v. Critel, 251 Neb. 128, 555 N.W.2d 773 (1996).

This section, which specifies factors for determining actual value of real estate for tax purposes, does not require use of all the specified factors, but requires use of applicable statutory factors, individually or in combination, to determine the actual value of real estate for tax purposes; actual value is largely a matter of opinion and without a precise yardstick for determination with complete accuracy. First Nat. Bank & Trust of Syracuse v. Otoe Cty., 233 Neb. 412, 445 N.W.2d 880 (1989).

Nothing in the statute requires the county assessor or county board of equalization to use all of the factors set forth therein. Instead, those officials may use such factors or combination thereof which they determine to be applicable in determining actual value under the state constitution. Affiliated Foods Co-op v. County of Madison, 229 Neb. 605, 428 N.W.2d 201 (1988).

Actual value, market value, and fair market value mean exactly the same thing. Xerox Corp. v. Karnes, 217 Neb. 728, 350 N.W.2d 566 (1984); Chudomelka v. Board of Equalization, 187 Neb. 542, 192 N.W.2d 403 (1971).

Nothing in this section requires the county assessor or county board of equalization to take into account all of the elements of the formula contained therein, but only those determined to be applicable. Airport Inn v. County Bd. of Equalization, 215 Neb. 659, 340 N.W.2d 378 (1983).

Board found the actual market value of the property in question to be the same as the purchase price. Potts v. Board of Equalization, 213 Neb. 37, 328 N.W.2d 175 (1982); LaGord Assoc. v. County of Cass, 209 Neb. 99, 306 N.W.2d 578 (1981).

"Actual value" of a development's common areas is not reflected in the increased value of the adjacent lots where the grant of use privileges to lot owners in the common areas lacks sufficient formality, definition, and duration of creation to constitute valid restrictions on the use of the common areas. For the purposes of taxation, the terms actual value, market value, and fair market value mean exactly the same thing. Beaver Lake Assn. v. County Board of Equalization, 210 Neb. 247, 313 N.W.2d 673 (1981).

Items set out by statute as examples to be used in determining value of property subject to taxation are not the only factors which enter into the valuation of property for taxation. Gradoville v. Board of Equalization, 207 Neb. 615, 301 N.W.2d 62 (1981); Nash Finch Co. v. County Board of Equalization, 191 Neb. 645, 217 N.W.2d 170 (1974); Hastings Building Co. v. Board of Equalization, 190 Neb. 63, 206 N.W.2d 338 (1973); County of Gage v. State Board of Equalization & Assessment, 185 Neb. 749, 178 N.W.2d 759 (1970).

Sales-assessment ratios were given consideration in determining actual value of land for taxation. County of Loup v. State Board of Equalization & Assessment, 180 Neb. 478, 143 N.W.2d 890 (1966).

Assessor properly considered all elements of value. Josten-Wilbert Vault Co. v. Board of Equalization, 179 Neb. 415, 138 N.W.2d 641 (1965).

Actual value is to be determined by using the applicable elements set forth in this section. Richards v. Board of Equalization, 178 Neb. 537, 134 N.W.2d 56 (1965); Leech, Inc. v. Board of Equalization of Chase County, 176 Neb. 841, 127 N.W.2d 917 (1964); H/K Company v. Board of Equalization of Lancaster County, 175 Neb. 268, 121 N.W.2d 382 (1963).

Actual value is defined by law. Union P. R.R. Co. v. State Bd. of Equalization & Assessment, 170 Neb. 139, 101 N.W.2d 892 (1960); Chicago & N.W. Ry. Co. v. State Bd. of Equalization & Assessment, 170 Neb. 106, 101 N.W.2d 873 (1960); Chicago, B. & Q. R.R. Co. v. State Bd. of Equalization & Assessment, 170 Neb. 77, 101 N.W.2d 856 (1960).

There are no yardsticks by which actual value can be determined with complete accuracy. S. S. Kresge Co. v. Jensen, 164 Neb. 833, 83 N.W.2d 569 (1957).

Actual value means value in the market in the ordinary course of trade. LeDioyt v. County of Keith, 161 Neb. 615, 74 N.W.2d 455 (1956); County of Howard v. State Board of Equalization and Assessment, 158 Neb. 339, 63 N.W.2d 441 (1954); County of Douglas v. State Board of Equalization and Assessment, 158 Neb. 325, 63 N.W.2d 449 (1954); County of Grant v. State Board of Equalization and Assessment, 158 Neb. 310, 63 N.W.2d 459 (1954); Novak v. Board of Equalization of Douglas County, 145 Neb. 664, 17 N.W.2d 882 (1945).

In tax valuation cases, actual value is largely a matter of opinion and without a precise yardstick for determination with complete accuracy. Reynolds v. Keith Cty. Bd. of Equal., 18 Neb. App. 616, 790 N.W.2d 455 (2010).

The purchase price of property, standing alone, is not conclusive of the actual value of the property for assessment purposes; it is only one factor to be considered in determining actual value. Reynolds v. Keith Cty. Bd. of Equal., 18 Neb. App. 616, 790 N.W.2d 455 (2010).

This section requires the use of applicable statutory factors, individually or in combination, to determine the actual value of real estate for tax purposes. Cabela's, Inc. v. Cheyenne Cty. Bd. of Equal., 8 Neb. App. 582, 597 N.W.2d 623 (1999).

The actual value of real property for purposes of taxation may be determined by using professionally accepted mass appraisal techniques, including, but not limited to (1) comparison with sales of real property of known or recognized value, taking into account location, zoning, and current functional use (comparable sales approach), (2) earning capacity of the real property (income approach), and (3) reproduction cost less depreciation (replacement cost approach). Forney v. Box Butte Cty. Bd. of Equal., 7 Neb. App. 417, 582 N.W.2d 631 (1998).

2. Miscellaneous

Evidence of sale price alone may not be sufficient to overcome the presumption that the board of equalization has valued the property correctly. But where the evidence discloses the circumstances surrounding the sale and shows that it was an arm's length transaction between a seller who was not under the compulsion to sell and a buyer who was not compelled to buy, it should receive strong consideration. Dowd v. Board of Equalization, 240 Neb. 437, 482 N.W.2d 583 (1992).

Where the evidence shows the assessed value of property has been determined by a formula in substantial compliance with this section, which has been uniformly and impartially applied, such assessed value will not ordinarily be disturbed on appeal on evidence indicating a mere difference of opinion as to the valuation. Greenwood Ranch v. Morrill Cty. Bd. of Equal., 232 Neb. 114, 439 N.W.2d 760 (1989); Lexington Building Co., Inc. v. Board of Equalization, 186 Neb. 821, 187 N.W.2d 94 (1971).

Act held unconstitutional which would establish a method of valuing tangible personal property different from this section. State ex rel. Meyer v. McNeill, 185 Neb. 586, 177 N.W.2d 596 (1970).

Formula prescribed by this section states it should be used where applicable. Rodeo Tel. Membership Corp. v. County of Greeley, 181 Neb. 492, 149 N.W.2d 357 (1967).

State Board of Equalization and Assessment took into consideration the requirements of this section. Carpenter v. State Board of Equalization and Assessment, 178 Neb. 611, 134 N.W.2d 272 (1965).

Formula furnished is applicable to personal property as well as real estate. L. J. Messer Co. v. Board of Equalization, 171 Neb. 393, 106 N.W.2d 478 (1960).

Where statutory formula was applied fairly and impartially to all similar properties, assessment should be sustained. Newman v. County of Dawson, 167 Neb. 666, 94 N.W.2d 47 (1959).

Section applied to stock of foreign corporation. Omaha Nat. Bank v. Jensen, 157 Neb. 22, 58 N.W.2d 582 (1953).